Documentos de Académico
Documentos de Profesional
Documentos de Cultura
October 2005
Foreword
This notice cancels and replaces Notice 179E (October 2002). It also cancels
and replaces Notice 179F (May 2002). Details of any changes to the previous
version can be found in paragraph 1.1 of this notice.
Part of paragraph 3.5 of this notice which refers to record keeping requirements has
the force of law under the Revenue and Traders (Accounts and Records) Regulation
1992. These paragraphs are indicated by being placed in a box.
EXAMPLE:
If you receive a net payment you must include the full value before such deductions
(and including VAT) in your scheme turnover. This will usually be the value shown
on your sales invoice.
If you have hearing difficulties, please ring the Textphone service on 0845 000
0200.
If you would like to speak to someone in Welsh, please ring 0845 010 0300,
between 8.00 am and 6.00 pm, Monday to Friday.
All calls are charged at the local rate within the UK. Charges may differ for
mobile phones.
1. Introduction
1.1 What is this notice about?
This Notice replaces the October 2002 version of this Notice as well as Public Notice
179F: Fuel Substitutes, which has now been withdrawn. It gives details of the various
biofuels and their excise duty rates. It also explains the roles and responsibilities of
producers of these products.
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Notice 179E Biofuels and other fuel substitutes
October 2005
You can access details of any changes to this Notice since October 2005 either on
our Internet site at www.hmrc.gov.uk or by telephoning our National Advice Service
on 0845 010 9000.
This notice and others mentioned are available both on paper and on our website.
• manufacture Biofuels; or
179 Mineral (Hydrocarbon) Oils: Duty and VAT: Warehousing and related
procedures
989 Visits by Customs and Excise Officers (this is liable to change to refer to
HM Revenue & Customs)
Secondary The Biofuels and Other Fuel Substitutes (Payment of Excise Duties
etc.) Regulations 2004 (SI 2004/2065)
The Other Fuel Substitutes (Rates of Excise Duty etc) Order 1995 (SI
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Notice 179E Biofuels and other fuel substitutes
October 2005
1995/2716)
Changes to excise duty rates are normally contained in the annual Finance Act and
are published in Budget Notices. The VAT law is the Value Added Tax Act 1994 and
orders and regulations made under that Act.
This Notice explains how we interpret the law and is not a substitute for the law.
However, parts of this Notice have the force of law. These are identified at the
relevant places in the Notice. Where appropriate we will quote the law and we will
use the titles and abbreviations used above.
If you issue special equipment or protective clothing to your staff when they are
undertaking activities such as handling, inspecting or sampling biodiesel then you
must provide similar clothing and equipment to us when we undertake the same
activities.
Biodiesel is produced commercially and can be bought from some petrol stations.
However there are 'recipes' available on the internet for the domestic production of
biodiesel. These usually involve mixing methanol with sodium hydroxide (also known
as caustic soda or lye), and pouring the resulting mixture into vegetable oil.
Such home production raises serious health and safety concerns, as it involves
hazardous chemicals and the risk of fire and explosion.
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Notice 179E Biofuels and other fuel substitutes
October 2005
At the very least a poorly made product could seriously damage a vehicle engine.
www.hse.gov.uk
• the ester content of which is not less than 96.5% by weight; and
• Biodiesel; and
• heavy oil that has not been charged with the excise duty on
hydrocarbon oil.
• bioethanol; and
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Notice 179E Biofuels and other fuel substitutes
October 2005
Any product added to motor fuel which is not hydrocarbon oil, as defined in Section
1(2) of the Hydrocarbon Oil Duties Act 1979 (HODA), biodiesel, bioethanol, bioblend
or bioethanol blend is considered by the Commissioners to be for use as an additive
in that motor fuel and will be subject to excise duty under Section 6A of HODA.
The duty rate is determined by what sort of engine the product is designed to be
used in. So: products designed for use in a diesel engine shall attract the sulphur-
free diesel rate; products designed for an unleaded petrol engine shall attract the
sulphur-free petrol rate; and products designed for use in leaded petrol engines shall
attract the light oil rate. Products designed to be multi-purpose (i.e. for use in any
kind of petrol engine) attract the sulphur-free petrol rate.
Any product that is 100 per cent hydrocarbon oil and is used solely for lubrication is
exempt from excise duty.
No. Action
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Notice 179E Biofuels and other fuel substitutes
October 2005
At this stage, we may visit you to examine the suitability of your premises.
In light of European case law the Environment Agency is obliged to consider that
waste derived biodiesel has not ceased to be waste until it has been burnt in an
engine for energy recovery. However the Environment Agency has set out a position
that it does not consider that requiring environmental authorisations for the storage,
supply and use of waste derived biodiesel for use as a motor fuel is in the public
interest.
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Notice 179E Biofuels and other fuel substitutes
October 2005
The use of waste derived biodiesel to support combustion in industrial plant such as
a boiler will be subject to controls under the Waste Incineration Directive and
regulated through PPC by Local Authorities or Environment Agency.
Failure to secure the appropriate authorisation from the Agency may lead to
enforcement action. Further details on which controls apply can be obtained by
contacting your local Environment Agency office telephone: 08708 506 506.
The responsibility for this rests with the producer who must carry out sufficient tests
to show that the specifications are met. We may also carry out sample tests as part
of our audit programme.
If the product does not meet the appropriate definition it will be considered a fuel
substitute and will attract a higher rate of duty. See sub-paragraph 3.1.1 for more
information.
For example, in order to be Biodiesel, a product must meet all of the following
criteria:
• The total ester content must not be less than 96.5% by weight;
and
Fuel substitutes pay the rate of duty applicable to the type of engine they are
designed for use in. For example, a product designed for use in a diesel engine will
attract the sulphur-free diesel rate. With fuel substitutes, the duty rate is applied to
the whole non-hydrocarbon oil content of the liquid. So, if a duty paid fuel substitute
is added to another fuel substitute which is not duty paid, duty is due under Section
6A of HODA on that part of the mixture that has not already been charged with duty
under that section.
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Notice 179E Biofuels and other fuel substitutes
October 2005
3.2.1 Any organic matter that is available on a renewable or recurring basis qualifies
as biomass. For example:
• Aquatic plants;
• Grasses;
• Residues;
• Fibres;
• Animal wastes;
Revenue & Customs consider that 'diesel quality' means that biodiesel will run, in a
blend with ordinary diesel, an engine that would normally run on diesel. Biodiesel
does not have to be used exclusively in the fuel tank, although this is possible.
Most vehicles require a blend of biodiesel (approx. 5%) and ordinary diesel (approx
95%) to meet manufacturers' specifications.
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Notice 179E Biofuels and other fuel substitutes
October 2005
If Revenue & Customs suspect, either through lack of supporting evidence, or due to
other information, that the product does not meet the specification, they may take
representative samples for testing (see regulations 10 and 11 of Biofuels and Other
Fuel Substitutes (Payment of Excise Duties etc) Regulations 2004).
Producers can provide evidence by having an independent test, which addresses all
aspects of the specification. In the case of smaller producers who are not supplying
the product commercially, evidence can be given by providing a full description of the
recipe and method used to manufacture the product and evidence that this is the
recipe and method consistently used.
Under the powers given by Regulation 6 of the Revenue and Traders (Accounts and
Records) Regulations 1992 Revenue & Customs require that details of recipes used
to produce biodiesel are kept and preserved for six years. This requirement also
applies to supporting documents showing that the recipe is followed for each batch
produced and to the preservation of any test results linked to particular batches.
The recipe should confirm that the biofuel has been made using ingredients that will
result in a fuel that meets the biodiesel specification. In simple terms this excludes
the use of ingredients such as white spirit or other hydrocarbons such as kerosene in
the production process.
There are restrictions on the use of tied oils, which are detailed in Section 10 of
HODA. White spirit that has been relieved of duty as a 'tied oil' should not be used as
a road fuel or an ingredient in road fuel. If this is added to SVO or used in biodiesel
production the whole batch would be rendered liable to duty at the sulphur-free diesel
rate
Any product that does not meet the Biodiesel specification will be considered a fuel
substitute and will attract the appropriate duty rate.
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Notice 179E Biofuels and other fuel substitutes
October 2005
In cases of doubt or difficulty you should contact our National Advice Service
for further advice.
3.6 Bioethanol
A new rate of duty on bioethanol used as road fuel was introduced with effect from 1
January 2005. Bioethanol is a liquid fuel consisting of ethanol produced from
biomass that is capable of being used for the same purposes as light oil. The duty
rate of bioethanol is 20 pence per litre below the rate applicable to sulphur-free
petrol. Further information is given in Budget Notice 27/04. At the time of publishing,
sulphur free and ultra low sulphur petrol have the same rate of duty.
Revenue & Customs have approved a formulation of denatured alcohol for use in the
manufacture of bioethanol intended for blending with gasoline for use as a road fuel.
The formulation is based on the addition of methanol and denatonium benzoate to
the ethanol.
With every 990 parts by volume of alcohol (of a strength not less than 85 per cent.
alcohol by volume) mix 10 parts by volume of methanol (of standard BS506), and to
the resulting mixture add denatonium benzoate in the proportion of 10 micrograms
per millilitre. The approved use is for blending with gasoline to be used as a road
fuel.
However, it is important to note that under the new legislation only ETBE made with
bioethanol produced from biomass (Bio-ETBE) will benefit from the new lower rate.
ETBE produced with bioethanol made from synthetic ethanol is not eligible and will
continue to be treated as a fuel substitute or extender and will therefore still be liable
for duty at the rate for sulphur-free petrol.
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Notice 179E Biofuels and other fuel substitutes
October 2005
ETBE/petrol blends will not require a further denaturing process but, like bioblend,
ETBE/petrol blends must be produced in a tax warehouse. Following production of
ETBE/petrol blends the ethanol used in the manufacture will no longer be considered
an alcohol for spirits duty purposes and will instead be treated as a motor and
heating fuel.
Bioethanol can be moved without payment of duty provided it originates from a tax
warehouse and the purpose of the movement is to allow blending with light oil in a
tax warehouse.
The Excise Warehousing (Energy Products) Regulations 2004 provide for 'special
energy products' such as biodiesel to be stored and moved without payment of
excise duty. Such movements are subject to the usual conditions e.g. accompanying
documents.
This relief applies to all biofuels; it is not restricted solely to those that meet the
Biodiesel/Bioethanol specification.
If you are approved for deferment, you should set-off the relief against your normal
excise duty liability in Section 2.b. of Form HO10.
If you are not approved for deferment then you should set-off the relief against your
normal excise duty liability on Form HO930.
In any other case, you will need to make a claim, in writing, to the Mineral Oil Reliefs
Centre at the address shown in Section 5 of this Notice.
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Notice 179E Biofuels and other fuel substitutes
October 2005
In all cases, we may ask you to provide evidence to substantiate your claim. These
may be in the form of purchase orders, delivery notes and sales invoices, to show
that the biofuel in question has been used as fuel to generate electricity. You may
also need to provide evidence that the biofuels were duty-paid and are not the
subject of any other application or claim for repayment, remission or drawback.
Again, any cases of difficulty should be referred to our National Advice Service for
clarification.
(b) as an additive or extender in any substance used as fuel for any motor, engine or
other machinery
• as a heating fuel;
However, see paragraph 5.2 regarding the mixing of Biodiesel and Bioblend with
rebated heavy oil.
• set aside; or
'Set aside' means the point at which it is decided that the product is going to be used,
either by yourself or sold to other users, as a motor fuel. This decision means that the
fuel has been 'set aside' for a chargeable use.
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Notice 179E Biofuels and other fuel substitutes
October 2005
To obtain the lower duty rates for Biodiesel, Bioethanol or their respective blends the
imported product must meet the UK fiscal specifications detailed in paragraph 2.1
above.
• filling in the appropriate line on the return, which is left blank for
this purpose; and
• putting the figure 589 for biodiesel, or 595 for bioethanol after the
figure 33 in the second column headed 'Tax Type'
• for other fuel substitutes you should fill in the appropriate line
according to the engine type that your product will be used in.
If you do not use or set aside any biofuels in any given month you should still send in
the HO930 showing a NIL liability. You should send the completed form together with
payment for the duty due to:
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Notice 179E Biofuels and other fuel substitutes
October 2005
Your accounting period will be the calendar month and payment must be made (and
the return furnished) by the 15th of the following month. So, if you are accounting for
your liability for April, we must receive the return and payment by 15 May.
If there is a change of duty rate during the accounting period (for example, if there is
a Budget) then you must show the volumes set aside or delivered at the two different
duty rates. There are blank lines at the bottom of the form to accommodate this.
If you are approved for deferment then you will need to complete Form HO10.
Further details are given in Section 4.7 below.
You need to obtain a Duty Deferment Account in order to do this. See Notice 179 for
more information.
The excise duty due on these blends must be pro-rated between the two grades on
your HO10 and be shown against the appropriate tax types. For example, in the case
of bioblend, you must account for duty under tax type 589 for the biodiesel portion
and 545 for the ULSD portion.
If you use any other type of heavy oil to make bioblend, you need to show that
portion of the blend under the appropriate tax type.
You must be able to support the apportionment from your production and blending
records. The proportions are to be shown in your records to 'the nearest 0.001%.'
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Notice 179E Biofuels and other fuel substitutes
October 2005
If you account for your liabilities in this way, you will need to submit a duty account on
a Form HO10, rather than a HO930.
The standard accounting period currently runs from midnight on the 15th of the
month to midnight on the 14th of the following month.
You will also need to provide a guarantee if you are going to defer your excise duty
liability. At the time of publishing, this guarantee must be sufficient to cover one
month's maximum excise duty liability, or £9.5 million whichever is the lower. Details
of how to obtain a deferment account and the excise duty accounting procedures are
given in Notice 179 Mineral (Hydrocarbon) Oils: Duty and VAT: Warehousing and
Related Procedures.
Additionally, The Biofuels and Other Fuel Substitutes (Payment of Excise Duties etc)
Regulations 2004 require producers to keep and maintain a Motor Fuels Record. The
record keeping requirements differ depending on whether you are supplying biofuels
to others, or using those that you produce yourself. The following table illustrates the
requirements.
Before the product leaves the No later than the chargeable use occurs,
producer's premises, record - record -
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Notice 179E Biofuels and other fuel substitutes
October 2005
• in the case of other fuel substitutes, what type of engine the fuel
is suitable for use in, see section 2.2 for further details,
• the quantity, in standard litres, of fuel sent out, see section 4.8
for further details,
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Notice 179E Biofuels and other fuel substitutes
October 2005
We will also advise you about how you may account for any additional duty that may
be outstanding.
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Notice 179E Biofuels and other fuel substitutes
October 2005
You will need to show us that the Biodiesel was fully duty paid and that it had not
been used as a road fuel.
Additionally, claims must be made within three months of the end of the period to
which they relate.
For further information on how to make a claim you should contact our National
Advice Service. You should send your claim along with supporting evidence to:
This scheme does not apply to users of Bioblend, Bioethanol or Bioethanol blend.
This system has been put in place because it is recognised that it can be difficult for
householders to obtain Biodiesel for non-road use that has not already been charged
with excise duty. This will be an administrative decision for the supplier, who may not
supply sufficient quantities of domestic heating Biodiesel to differentiate between
road and non-road customers.
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Notice 179E Biofuels and other fuel substitutes
October 2005
You can find out more detailed information about visits by our officers in Notice 989
Visits by Customs and Excise Officers.
Action Law
Enter and inspect any production The Biofuels and Other Fuel Substitutes
premises, other than a private (Payment of Excise Duties etc) Regulations
dwelling house 2004, Regulation 10 & 11.
Examine any vehicle on those The Biofuels and Other Fuel Substitutes
premises (Payment of Excise Duties etc) Regulations
2004, Regulation 10 & 11.
Inspect or sample any biofuel found The Biofuels and Other Fuel Substitutes
on those premises (Payment of Excise Duties etc) Regulations
2004, Regulation 10 &11.
Inspect or sample any biofuel found The Biofuels and Other Fuel Substitutes
on or in any vehicle found on those (Payment of Excise Duties etc) Regulations
premises 2004, Regulation 10 & 11.
Require the production of your CEMA 1979 s.118B. See also Revenue
business records, and remove or take Trader (Accounts and Records) Regulations
of copies of those records 1992.
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Notice 179E Biofuels and other fuel substitutes
October 2005
6.3 Penalties
If you make a false declaration in relation to the production or blending of biofuels or
fail to make returns showing your excise duty liability (even if this is NIL) then you
could be liable to financial penalties.
6.4 Appeals
If you disagree with a decision made by one of our officers you may be able to
appeal to the VAT and Duties Tribunal. More information is given in Notice 990
Excise and Customs Appeals.
7. Glossary
Term Description
Bioblend Any mixture that is made by mixing Biodiesel and heavy oil not
charged with the excise duty on hydrocarbon oil (duty-suspended
heavy oil).
Biodiesel A diesel quality liquid fuel derived from biomass or waste cooking
oils, the ester content of which is not less than 96.5% by weight;
and the sulphur content of which does not exceed 0.005 per cent
by weight, or is nil.
Chargeable The use of Biofuel as fuel for any engine, motor, or other
Use machinery, or as an additive or extender in any substance so used.
Duty The process that allows oils to be stored without paying Excise
Suspension Duty, until the oils are delivered to home use. This process used to
be known as storing goods 'under bond'.
Excise Duty The United Kingdom revenue duty chargeable on both imported
and home produced energy products. It is charged at a specific
rate on the quantity and description of products delivered to home
use.
Excise Duty The time when the requirement to pay any duty with which the
Point goods become chargeable is to take effect.
Excise Goods Goods that are liable to Excise Duty. Biodiesel and Bioethanol are
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Notice 179E Biofuels and other fuel substitutes
October 2005
classed as Excise Goods when they are set aside or sent out for a
chargeable use.
Fuel Any liquid used in place of a mineral (hydrocarbon) oil as fuel for
Substitute any motor, engine or other machinery.
Gas Oil Heavy oil of which not more than 50% by volume distils at a
temperature not exceeding 240°C and of which more than 50% by
volume distils at a temperature not exceeding 340°C. If it has been
marked, it is also known as 'Red Diesel'.
Heavy Oil Means hydrocarbon oil other than light oil (HODA Section 1(4)).
(a) of which not less than 90° by volume distils at a temperature not
exceeding 210°C, or
Marked Oils Those oils that have been marked to claim a rebate of Excise Duty.
The oils affected are Gas Oil, and Kerosene.
Marking Adding certain chemicals and dyes to oils in order to claim a rebate
of Excise Duty.
Mineral Oils Hydrocarbons that are liquid below 15°C. The terms 'hydrocarbon
oils' and 'mineral oils' mean the same thing.
Rebate A reduction in Excise Duty that is allowed on oils that have been
put to industrial and off-road use. They are marked to show that
they have been rebated. It is illegal to use rebated fuels as fuel
in road vehicles.
(b) animal fat set aside for use as motor or heating fuel;
(c) vegetable fat set aside for use as motor or heating fuel;
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Notice 179E Biofuels and other fuel substitutes
October 2005
(e) biodiesel; or
Tied Oil Oil that has been delivered conditionally relieved of duty under
Section 9 of HODA – see PN 184A for further details.
ULSD Ultra Low Sulphur Diesel is gas oil that contains less than 0.005%
sulphur by weight. The density of the oil must not exceed 835Kg
per cubic metre at a temperature of 15°C, and not less than 95%
by volume distils at a temperature not exceeding 345°C and which
is not sulphur-free diesel.
Please note this address is not for general enquiries. You should ring our National
Advice Service about those.
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Notice 179E Biofuels and other fuel substitutes
October 2005
If we are unable to resolve your complaint to your satisfaction you can ask the
Adjudicator to look into it. The Adjudicator, whose services are free, is a fair and
unbiased referee whose recommendations are independent of Revenue & Customs.
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